• Daniel Ethan Finneran

A Thought On Tariffs

June 2019

Resonant to all, though unfortunately not always as universally repugnant as it might be, the language of war comes in three varieties. At its most innocuous, it’s figurative. This annoys us but imperils us not. As it relates to war, figurative language is, at least in most cases, used rather to arouse animosity than to effectuate any real end. Words alone are the weapons used, and ink—in the absence of blood—is worth every drop. Though perhaps fistic, it’s ultimately only rhetoric, and we consider it with lenience and grant it its place.

At its most dangerous, the language of war is literal. Considering the three types, this confronts us as being the most perilous. It’s the type to which we must be most perceptive if we are, in the words of that slightly too ingenuous genius Immanuel Kant, to seek the perpetuation of peace in this truculent world. If unchecked, the literal verbalization of the words of war quickly becomes their mobilization. Troops soon find themselves gathered in serried lines along distant frontiers. This is the proximate cause of the destruction of states and the premature deaths of people—be they innocent or belligerent. The language of war, when literally applied, is odious to the enlightened, deleterious to the soul, and always deadly to the body in which it’s housed.

Finally, at its most impetuous, the language of war is financial. Indeed, it’s this third variety upon which we focus our attention at this time. We do so as our exuberant and petulant, tiring and tireless, affective and divisive leader of our free world declares war on the freedom of trade.

A proposition at which we once laughed now demands our sober resignation: at the behest of President Trump, we are in the throes of a legitimate, ominous, and multi-hemispheric trade war. As of this week, we’ve enmeshed ourselves in a sort of trial by tariff with no fewer than two countries (or, as more appropriately we might call them henceforth, two combatants of a foreign, fiscal type). Important to note is that they’re two of the countries, of all of the countries on this expansive Earth, with whom our domestic companies and our government agencies do the most business.

The first country-combatant is China. Of course, it’s a nation of incredible size and strength, a modern Oriental leviathan in every biblical sense of the word. Confucian in origin and impecunious for so long a duration of its stoic life, China has since tasted the epicureanism of the modern age. Unabashed and understandably hungry (a result, doubtless, of a half-century of enforced famine under subsequent autocratic regimes), it wants to have its long-awaited fill. That said, to have its fill is to subvert its peculiar though central philosophy of austerity and socialistic deference, but there seems to exist in China little in the form of cognitive dissonance. To misquote Julius Caesar—a man, in his day, just like Xi Jinping in ours, given to delusions of permanence of office—it’s come to love the capitalism (however much invigilated and controlled by the state) but hate the capitalist. “State-run” capitalism is the putative banner under which this vexingly contradictory country runs.

It’s a country about whose trade practices we’ve come to know much and, in having attained an understanding of them, have come very much to despise. They are anathema to the American way. And, in the accumulation of our wisdom—hardened, as it’s been, through our dealings with the clever apparatchiks of that pseudo-communistic state—we’ve become enraged. It’s not without rationality that we’ve become so angry at the hand we’ve been dealt by Beijing. Despite the genial Sino-American façade worn daily in the press, China is an inveterate antagonist, if not a tempting economic enemy, for those who pay them any mind. It’s a country of whose illiberal trade policies and blatant intellectual property crimes we liberals (with the emphasis being on the lowercase inscription of that “L”) and intellectuals here in America have become too painfully aware. Yet, that being said, it seems to be the case that these are the sorts of crimes for which we’ll no longer stand.

Unable to negotiate a trade deal with this most ancient of states, our tyro Trump placed on the importation of China’s many goods a score of tariffs at disquietingly high rates. China, shrewd and calculating as she is incalculably old, responded in kind. Thus, each has slapped upon the economy of the other an expensive incentive to shop domestically and to spurn foreign trade. The effect is likely to be mutually injurious. Generous subsidies will be needed for the domestic producers whose products no longer sparkle in foreign markets with the same shimmer of affordable appeal. Consumers, likewise, will be adversely affected.

Consumable products, shamefully foreign but enticingly cheap, will now be set at prohibitively high costs. The response will be one of two things: we’ll either purchase the desired item from a potentially inferior American manufacturer (at an inflated or a simply higher rate), or we’ll charge higher prices to the consumer who awaits at the ultimate point of sale.

It’s true, the very thought of these tariffs were enough to roil financial markets—prone, as they are, to tremble at even the shadow of a portent. Now, the imminence of their effectuation is a reason of actual distress. Adding to that nauseating feeling of money hastening down the drain is the recent announcement that more tariffs would be expanded to this hemisphere, indeed to the neighbor atop whom our nation rests. With an eye toward their incremental increase, the Trump administration has announced tariffs on a various assortment of Mexican goods.

Mexico, proprietor of a frankly middling economy and one that’s dwarfed by that of China, is nevertheless a country with whom the U.S. does a ton of business. From agricultural imports to automotive parts and designs, goods and materials cross the southern border with dizzying and bustling and obviously lucrative rapidity every single day. The reason, however, for President Trump’s imposition of a tariff with Mexico isn’t nearly so easily defensible as it might be in the case of China. Rather a political than a purely economic measure, the administration is seeking to tackle the immigration problem by which our country has been positively burdened for the last thirty years by squeezing the Mexican government with the withering grip of our economic force. This is an indirect approach to the problem of the movement of people that will, in all likelihood, be completely unavailing.

This whole Mexican approach appears to me entirely misbegotten. Indeed, if we’re to take a slightly less sympathetic view of this administration (and who would deny us this liberty), it looks, at best, desultory and at worst inadequately construed. To address the failures of our immigration system by doing actual damage to our businesses is in no way beneficial and won’t improve either end. Surely, the Mexican government won’t be stirred to alter its policies at the border in the face of a prospective economic decline. Rather than play an inferior role to a now capricious, now obnoxious U.S., it’s hoping to bolster its trade with countries more congenial to its interests—countries like Canada and those throughout South America (save Venezuela) who hope to find themselves in the swell of a rising tide. In addition, an unintended consequence may be looming. The sobering nature of tariffs is the mutuality of their ill-effect. If Mexico’s economy is in any significant fashion affected in an adverse way, it could cause more and not fewer immigrants to seek greener American pastures. This is a possibility for which the Trump administration—hell-bent though it is on reducing illegal immigration—ought to be prepared.

Ultimately, to treat as amicably as I can this administration, I’ll say this: in the case of China, President Trump is addressing an economic problem economically. In the case of Mexico, he’s addressing an immigration problem wrongheadedly. Either way, that’s to speak little toward their efficacy or their chance for future success.

I’ll end by seasoning my amicability with a pinch of salt. Severity, really, is the dash that I need. Without this, no plate would be considered complete. A word must be said about the distance that exists between the president’s comprehension of tariffs as general, fundamental matter and what actually they are. If one’s to speak the language of financial war, as Trump certainly is trying to do, it must be in a cogent, accurate, and intelligible tongue. Trump has failed repeatedly to check off any of these boxes. His fundamental understanding of what a tariff is appears to me completely erroneous and ill-conceived. I’ve not yet read a definition that’s consistent with his impression.

Surely much to his staff’s interminable chagrin, he seems not to understand how these simple and quite old impediments to importation (what we call tariffs) work, and the many economic advisors by whom he’s surrounded haven’t been successful in a long-overdue remedial course. Doubtless, it’s not for a lack of trying: while they’ve been nothing if not hortatory, Trump’s been characteristically hidebound. The notion that a tariff is a tax on China is an obstinate opinion of which the president can’t be disabused. Of course, a tariff is nothing of the sort, but rather a burden imposed on American importers of Chinese goods.

If we’re to be successful in this ill-conceived, two-fronted, whimsical, and uneconomical trade war, it’d be eminently helpful if our commander-in-chief understood the language of war—be it figurative, literal, or, as it pertains to us today, financial.

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